Armed Forces: Personnel

Baroness Warwick of Undercliffe Excerpts

Monday 23rd April 2012 Grand Committee

[Baroness Warwick of Undercliffe]

My Lords, I thank my noble friend for introducing this debate and providing us with an opportunity to consider issues of such importance to our Armed Forces personnel. As she has highlighted, our Armed Forces are currently under great pressure. As the report puts it, “operational tempo remains high”. Gruelling tours in Afghanistan, and the Libya campaign, have placed a heavy burden on our services personnel and their families. This summer, there are the added operational demands of providing security for the London 2012 Olympics and the Diamond Jubilee.

These demands are being met with commitment and good will, at a time when our forces are experiencing a two-year pay freeze, cuts to MoD allowances, continuing cost-of-living increases and uncertainties over changes to come from the strategic defence and security review. While the Armed Forces Pay Review Body’s 2012 report notes carefully that recruitment and retention are,

“currently acceptable overall against a reducing manning requirement”,

it also highlights a “difficult year” for services personnel and their families. We know that to be true. While the pay freeze affects the whole of the public sector, it is not the case that all those in the public sector risk their lives when doing their jobs on our behalf.

I support my noble friend in contrasting the discomfort of pressures on the cost of living with the unrelenting day-to-day pressures on those we expect to serve us in battle. Those pressures make it vital that we get right anything that influences the retention of experienced personnel in our Armed Forces.

We have been reminded that, since November last year, the principles of the Armed Forces covenant are now enshrined in law. The covenant promises that the Armed Forces community should not face disadvantage because of its military experience. It sets out what safeguards, rewards and compensation military personnel can expect in return for military service. Fairness on pay and pensions, therefore, lies at the heart of the covenant.

The Government’s decision to implement a pay deal for our Armed Forces amounting to a real-terms cut seems to be at odds with the spirit of the covenant. At the very least, the Government should have allowed the pay review body to make its recommendations before deciding to cap pay rises at 1 per cent from next year. This decision cannot but harm the morale of serving personnel, even while they accept their share of austerity, and the PRB rightly makes the point that this will have an impact on recruitment.

However, my key point today concerns pensions, an issue that was raised by personnel of all ranks during a visit I made to HMS “Dauntless” recently under the auspices of the splendid Armed Forces Parliamentary Scheme. There is real anxiety over the proposed reforms to the Armed Forces pension scheme. The scheme is a highly valued part of the total remuneration package for the services, and a key recruitment and retention tool. Indeed, Armed Forces pensions are hugely important to satisfaction with the forces’ way of life.

Pensions can be taken at 55. Generally, people stay on longer if they believe that they have a good chance of getting promoted. Many do not, and there are several early-departure payment schemes whereby an individual can get some pension on leaving. As Major-General John Moore-Bick, general secretary of the Forces Pension Society, said, the unique nature of military service and employment patterns means that service men and women generally need to draw their Armed Forces pension for longer than they draw their pay. The average length of service is nine years; only 2 per cent of personnel serve to the age of 55; 34 per cent will earn an early-departure payment; and 64 per cent will not serve to the age of 40.

Service men and women rely on these small payments to see them into civilian life. I know this from what they told me on “Dauntless”, and from the experience of a friend whose father came out of the Army and returned to the UK aged 40, with two small children, no job and no house. The EDP housed and fed them for many months until he found work. These payments matter enormously. Therefore it is essential that the new pension scheme being designed by the MoD should protect and preserve the interests of service personnel. Confidence in their pension is crucial to morale—but it was not what I saw on HMS “Dauntless”.

If the Armed Forces fear that they are being stitched up, there is a desperate need to stem the tide of doubt. The commission on public sector pensions, chaired by the noble and learned Lord, Lord Hutton, recommended a switch to options based on average earnings over a career. The noble Lord acknowledged that in the Armed Forces the switch would take longer than the expected target date of 2015, and stressed that Armed Forces schemes should be tailored to the unique requirements and hazards of military careers. He also recommended that accrued rights for those in existing pension schemes should be protected. This was accepted by the Government, yet widespread uncertainty remains. As the review body report noted, this is not least because the Government made clear commitments to other public sector groups but so far have not offered similar clarity on how the commitments will apply to services personnel. Will the Minister tell the Committee whether the MoD and HM Treasury will undertake to resolve any outstanding issues on accrued rights as soon as possible, and end the uncertainty over the protection of earned pension provision?

Rumours spread like wildfire in the services. Good communications are essential. The PRB stresses the importance of clear, jargon-free messages. I would like reassurance from the Minister that the MoD has a communication strategy to ensure that whatever it proposes in this complex area is explained and thus understood at all levels. The PRB asks, too, that in the absence of trade union representation, the MoD will ensure that service men and women are enabled to express concerns about pension changes, and to articulate priorities for future provision.

My final point concerns the importance of the role played by the AFPRB. The review body's independence is vital. It is right that it should question plans for further pay increases and should challenge the MoD to show more flexibility on military wages. Service men and women trust the AFPRB as an independent, honest broker, and rely on it to make their case on pay and remuneration and to keep in mind its remit to take account of the particular circumstances of service life. Those circumstances, and the risks that service men and women take on our behalf, should be kept in mind by us all.